RAILWAYS £432,743 DOWN

Sun (Auckland), Volume III, Issue 783, 2 October 1929, Page 11

RAILWAYS £432,743 DOWN

Minister Presents Annual Statement UNPROFITABLE NEW LINES Attacking Problem of Costs (THE SUN’S Parliamentary Reporter J PARLIAMENT BLDGS., Today. THE railways last year lost £432,743, a sum which, represents £141,291 more than the previous year’s deficit. The Minister of Railways, the Hon. "W. B. Taverner, in his annual statement, attributes this increased loss largely to the unprofitable new lines recently taken over. In his accompanying report, submitted to the House of Representatives this afternoon, the General Manager of Railways, Mr. H. 11. Sterling, explains the heavy deficit and deals extensively with the problem of running and operating costs.

The gross revenue received during the year March 31 last, the period which is covered in the Minister’s Statement, was £8,249,838, and the credit attributed to developmental lines was £498,937, bringing the total revenue up to £8,747,975. The gross expenditure reached £6,849,383 and interest £2,331,335, a total expenditure of £9,150,715, leaving a deficit below revenue of £432,743. Passenger traffic, which realised £2,124,746, fell by £20,550 from the previous year, though freight receipts disclosed a gratifying increase of £165,990 over the previous 12 months, the sum received reaching £4,846,125. This increase in freight returns was produced almost, entirely by the carriage of agricultural products, grain, butter, cheese, wool, agricultural lime, soft coal, road metal, benzine and artificial manures. Live stock assisted in the increase, 560,311 head more being carried last year. The increased expenditure of the department from £6,685,123 in 1928 to £6,849,383 in the year just finished was attributed by the Minister mainly to the maintenance of rolling stock and transportation. Renewals and overhead expenses in connection with the workshops reorganisation increased the rolling-stock maintenance, while the additional mileage of line taken over during the year raised the transport costs to . a great extent. NOT PROFIT-MAKING The Minister does not regard the heavy deficit as a direct loss to the Dominion. “The railways, in the first place, wera undoubtedly constructed as a developmental institution rather than as a profit-making institution,” he says. “Indeed, it is scarcely possible to conceive that much of the mileage of the present railway system, even of the main lines, would have been constructed at all if the question as to whether they should be gone on with or not had been decided on a profit-making basis. As the years have gone on this policy has been continued. Nor has it been confined to construction only; it has extended also to operations, and many services and tariff concessions have been given in the past on the basis of the developmental aspect of the railway policy. “It is beyond the possibility of question that the country has reaped very material indirect return from the existence of the railways. This return, however, has not been reflected in the annual Railways Statements. It is none the less real. The whole question resolves itself into one as to whether the time has arrived when the country i 3 paying through the deficit on account of the railway work too much for the indirect returns that it is getting. “If we take the passenger figures alone we find that as compared with pre-war the revenue is down some £600,000. TakiDg also the natural increase that took place in the department’s passenger revenue prior to the advent of the road motor, we could confidently have expected that the passenger revenue alone, but for the influence of road motors, would have approximated to the amount of the present deficit, and the extra revenue would have been earned with comparatively small increase in expenditure.

“The question therefore arises as to what proportion of the railway deficit should be regarded as properly payable in respect to the developmental work of the railways. This obviously will depend on what the railways can be made to earn in the face of the fact that road-motor transport has now to be accepted as a permanent factor in the transport industry. “Before this can he determined it is essential that the respective spheres of railways and road transport should be determined and the fullest possible measure of co-ordina-tion obtained. As matters are at present, it would be impossible to say with any degree of certainty what the railways are worth as a revenueearning institution. The first step clearly is so to regulate the transport industry that the true value of each method of transport can be made clear. NEW WORKS The Minister explains "the Government’s decision to stop the Palmerston North deviation, and gives the assurance that all other works in hand by the department for the current year will be carried through. As these works are of great magnitude, the sum required to carry them out has, as far as the present year is concerned, absorbed all the money made available to the department for new works. This position is likely to continue for the next year or two.

Tlie'Minister declines to establish a programme of works for some years ahead, mainly because of rapidly changing conditions, but. he is paying special attention this year to the methods of communication within the department. The sum of £51,000 is being spent upon train control in the current year.

Improved time-tables and the extension -of the night-train system are mentioned as receiving attention; and the care of locomotives, and the progress, of the renewal fund, are also dealt with by the Minister, who concludes his statement:—“The strictest economy consistent with proper efficiency will be aimed at so far as the internal working of the department is concerned. As regards its external relationship with other factors of the transport industry, it will be my policy to work to the fullest possible degree in harmony with other-forms of transport, constantly endeavouring to give the fullest measure of usefulness to the community of the transport industry as a whole.”

The general manager of railways, Mr. H. H. Sterling, in dealing in his

report with the railways deficit, explains that no credit for loss was received by the department for the Kirikopani line, and the East Coast Main Trunk section, which, had they not been taken over, would have allowed the railways accounts to show a surplus of nearly £2,000,000 instead of the loss already disclosed. From the viewpoint of operating revenue and expenditure, therefore, the manager claimed, the department has recorded substantial progress. RECOVERING LOST BUSINESS With the continued decrease in passenger traffic, which is dealt with extensively in another phase of the report, Mr. Sterling says the railways must look more and more to the goods revenue for the major part of their receipts. He sees three ways of remedying the deficiency:—(l) A reduction in working expenses to produce cheaper transportation;’ (2) increased traffic to make good the loss; and (3) increased charges. So far as the first alternative is concerned a policy of constant review is being pursued. Hardly a day goes past, Mr. Sterling says, on which some aspect of the department's operations is not being modified and altered to secure reduced working expenses. The second provision is being attacked bj r improved facilities and the adoption of commercial methods for attracting rail-borne traffic. The third is the most serious facing the department, insofar as motor transport already has captured most of the high-class goods, and the department would not achieve Its purpose by raising the price of the lower class goods. The practice of allowing motor traffic to take all the high-class goods and leave the lower-class goods to the railway is one which calls for the serious consideration of every member of the community, Mr. Sterling says. Before increased rates could be discussed the amount of revenue that is likely to he derived from the increase had to be considered, he added, and also the amount of additional revenue that would be required. SAFETY AT CROSSINGS During the year the problem of level crossings has continued to engage our attention, he went on, and the policy of progressive development in the protection of level crossings has been pursued. A few figures in connection with this work may be of interest. The department employs a total of 80 crossing-keepers at 37 crossings, at an annual cost of £13,122, of which £1,107 is recovered from local bodies. The expenditure on the elimination of crossings by overhead bridges or subways has been approximately £150,000. There have been warning bells installed at 54 crossings, “wigwag” signals at 32 crossings, and flashing light signals at four crossings, at a total cost of £19,080. Every crossing has been provided with standard “Warning” notices at a cost of approximately £26,000. The total expenditure on the protection of level crossings is in the vicinity of £195,080, of which amount the Highways Board has spent £13,000 and the local bodies have spent £24,000, and there have been minor amounts provided by other persons or bodies, such as associations of motor interests.

The annual cost to the Railway Department of the upkeep of warning devices amounts to £3,SSO. Adding this to the wages bill for the crossingkeepers it will be seen that the recurring expense to the department on these two aspects of its operations is approximately £16,000.